Tata Power Company is planning to set up a coal-based power project, between 500 mw and 1,000 mw, in the newly created state of Chhattisgarh.
A senior Tata Power executive, who confirmed the move, said, "We are considering setting up a pithead power station in Chhattisgarh. A final decision is yet to be taken on the issue."
The company, which plans to develop a captive coal mine with group company Tata Steel close to the site, has sought the coal's ministry approval for the project.
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Tata Power will have to invest between Rs 2,000 crore and Rs 4,000 crore in the project (about Rs 4 crore per megawatt.)
Chhattisgarh is almost power sufficient. "We will trying selling the excess power to the neighbouring states or the Power Trading Corporation (PTC). Since the project is pithead-based, our power will be competitively priced," a Tata Power source said.
In a pithead-based plant, the coal mine is located very close to the project and power can be generated at low costs owing to substantial savings on transportation costs.
A mega power project must have a capacity of at least 1,000 mw and should be allowed to sell power across states through the PTC. The corporation will buy power from electricity-rich states and sell it to power deficient states.
Tata Power has considerable experience in coal-based power plants. Most of the power it supplies to Mumbai is generated from coal-based plants. It has a 1,350 mw power plant at Trombay near Mumbai.
The company also plans to set up a second captive coal mine along with Tata Steel in Jharkhand. This will be used to supply power to the Jojobera power plant near Jamshedpur. The 67.5 mw plant was acquired from Tata Steel in 2000-01 for Rs 300 crore.
The power major wants to expand its generating capacity for Rs 1,025 crore. The company has already added 120 mw and will now add another 120 mw by December, 2001.The power will be supplied to Tata Steel which will distribute it to other users in Jamshedpur. The company is also evaluating the possibility of setting up captive power plants for other companies.